1. Stingray Company's common stock has a beta of 1.25 and a standard deviation of returns of 15%. The risk free rate of return is 3% and the market risk premium is 9%. The company's marginal tax rate is 35%. Analysts expect Stingray's dividends to grow by 6% per year for the foreseeable future. Using the capital asset pricing model, what is Stingray's cost of retained earnings? Round intermediate steps and your final answer to four decimals and enter your answer in decimal format (.XXXX).